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Procurement

Business for South Africa issues call to action on local procurement

Business for South Africa (B4SA) has issued a call to action for corporate South Africa to undertake four actions to assist local procurement during the Covid-19 pandemic.

The B4SA, an alliance of the main business groups, is calling on companies to review their procurement practices and to give preference to local manufacturers.

The call to action is in response to President Cyril Ramaphosa’s October 2018 convening of the country’s second Jobs Summit to address the need to generate a substantial number of new jobs in South Africa over the coming years.

A key deliverable from the Jobs Summit is a framework agreement between government, organised business and organised labour that outlines concrete and measurable steps to achieve set goals in terms of increasing levels of employment.

One of the key areas identified is boosting domestic demand for locally manufactured products to reinvigorate the job market.

“The more we manufacture locally, the better we become at developing a sustainable manufacturing sector to produce for our country’s needs in addition to identifying opportunities for export.”

This, in turn, increases South Africa’s production capacity which enables the country to, in the first instance, retain existing jobs, and in some cases, create new ones.

In this regard, B4SA says that corporate South Africa is encouraged to embark on good corporate citizenship campaigns highlighting support for localisation. To give effect to this, the deliverables from organised business, as contained in the Jobs Summit framework agreement, include various measures to implement local procurement. These involve conducting engagements with corporates to identify opportunities for local procurement within respective value chains and facilitating opportunities for the procurement of locally produced goods.

COVID-19 SUPPLY CHAIN IMPACT

B4SA further highlights that the Covid-19 pandemic has caused major disruptions to global markets and has highlighted the vulnerability of South Africa’s reliance on global supply chains. This has been particularly evident in securing medical equipment and personal protective equipment (PPE).

B4SA says that in many cases, the opportunity to procure from local manufacturers would have been beneficial from a pricing and lead-time point of view.

The local procurement opportunities presented by Covid-19 include identifying and growing local manufacturing in support of South Africa’s medical equipment and PPE requirements.

B4SA says that South Africa’s local manufacturing opportunity, however, needs to extend beyond Covid-19 demands, to strengthen and grow its local manufacturing base on an economically feasible and competitive basis.

To this end, B4SA points out that local procurement advocates have been collaborating to ensure that a holistic approach is applied, prioritising local procurement in support of economic recovery. These advocates have formed a technical working committee focused on mobilising corporates to support the localisation agenda. Members of the committee include Business Unity South Africa, Business Leadership South Africa, National Business Initiative, Manufacturing Circle, Proudly South African and South African Breweries.

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